Case Law Details
Relaxo Footwear Ltd. Vs Assessing Officer (ITAT Delhi)
The case of Relaxo Footwear Ltd. vs Assessing Officer revolves around an appeal against the order passed by the National e-Assessment Centre under section 143(3) r.w.s. 144C and 144C(13) of the Income-tax Act for Assessment Year 2016-17. The primary issue pertains to the addition made under section 80IC based on transfer pricing adjustments.
The appellant, Relaxo Footwear Ltd., filed its return of income for AY 2016-17, declaring a total income of Rs.160,16,70,610. The Assessing Officer (AO) initiated transfer pricing adjustments regarding specified domestic transactions involving the transfer of semi-finished goods from non-eligible units to an eligible unit where deduction under section 80IC was claimed.
The AO applied the Transactional Net Margin Method (TNMM) and identified comparables. He computed a transfer pricing adjustment of Rs.91,04,673, leading to the disallowance of deduction under section 80IC for that amount. The Dispute Resolution Panel (DRP) upheld the TNMM and directed the AO to recompute the deduction under section 80IC at 30%.
Omission of Section 92BA: The issue arose whether transfer pricing adjustments could be made under section 92BA for specified domestic transactions, considering that section 92BA(i) was omitted by the Finance Act, 2017. The omission had the effect of nullifying section 92BA(i).
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